A shake-up to the mining code in South Africa could have a far-reaching impact on miners listed in the UK, amid fears the government of that country will try to impose onerous new requirements around company ownership.<\/p>\n
A new version of the mining charter is expected to propose raising the mandatory black ownership of mining assets from 26pc to 30pc under the government\u2019s Black Economic Empowerment (BEE) initiative<\/p>\n
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But the mining industry is particularly worried about a second proposal, which would require miners to maintain 30pc black ownership even when the original BEE holders have sold their stake.<\/p>\n
<\/p>\n
Under the original charter, mandated in 2004, miners only need \u201cempower\u201d their assets once.<\/p>\n
<\/p>\n
South Africa\u2019s Chamber of Mines has threatened legal action against the government if it imposes the new conditions, which it says will deter much-needed foreign investment and have been drafted with little consultation from the industry.<\/p>\n
<\/p>\n
The new charter – which is months overdue and has been the subject of disagreement within the ruling ANC party – was approved by Cabinet in draft last week and is expected to be made public in a matter of weeks.<\/p>\n
<\/p>\n
Mining contributed SAR286bn (\u00a317bn) to the South African economy, or 7.1pc of its GDP, in 2015. London-listed companies Anglo American, Lonmin, Glencore and Petra all operate in South Africa.<\/p>\n
<\/p>\n
Anglo boss Mark Cutifani has called on the government to ensure that the charter encourages investment. Earlier this year, he told The Telegraph that investors would feel the government\u2019s promises had been broken it changed the BEE threshold.<\/p>\n
<\/p>\n
A spokesman for Anglo said the company was waiting to see \u201cwhether industry submissions have been considered.\u201d<\/p>\n
<\/p>\n
\u201cAnglo American is and remains committed to meeting South Africa\u2019s transformation objectives and has been a long-standing and major contributor to transformation,\u201d he added.
\u201cThese proposed changes will send a shudder down the backs of investors,\u201d said Kieron Hodgson, an analyst at Panmure Gordon.<\/p>\n
<\/p>\n
Hunter Hilcoat, another analyst at Investec, added: \u201cWe should be alarmed, not only by the BEE threshold increases but by several potential aspects, including the re-empowerment requirements.\u201d\u00a0<\/p>\n
<\/p>\n
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A shake-up to the mining code in South Africa could have a far-reaching impact on miners listed in the UK, amid fears the government of that country will try to impose onerous new requirements around company ownership.
A new version of the mining charter is expected to propose raising the mandatory black ownership of […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-393418","post","type-post","status-publish","format-standard","category-business"],"yoast_head":"\n
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